Singapore's United Engineers in talks with Perennial on buyout: Report

UE BizHub City (formerly known as UE Square) is United Engineers’ flagship mixed-use project. United Engineers is one of Singapore’s oldest companies, with interests in property, engineering and distribution, technology and manufacturing.
UE BizHub City (formerly known as UE Square) is United Engineers’ flagship mixed-use project. United Engineers is one of Singapore’s oldest companies, with interests in property, engineering and distribution, technology and manufacturing.PHOTO: ST FILE

SINGAPORE (BLOOMBERG) - United Engineers' largest shareholders picked Perennial Real Estate Holdings for final talks to buy the century-old Singapore property group, people with knowledge of the matter said.

Perennial, led by chief executive officer Pua Seck Guan, edged out other suitors including KKR & Co and SingHaiyi Group that also submitted final bids, the people said, asking not to be identified because the information is private.

An agreement could be reached as soon as next month for United Engineers, which has a market value of S$1.7 billion according to one of the people. 

Any deal will add to the US$11.6 billion of acquisitions in Singapore's real estate industry over the past 12 months, data compiled by Bloomberg show.

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A buyer of United Engineers would gain a property portfolio that includes Singapore shopping centers like Rochester Mall and mixed-used developments such as UE BizHub City, as well as condominiums, hotels and serviced apartments, according to its website. 

The company's biggest investors, OCBC Bank and its insurance unit Great Eastern Holdings said in January they're reviewing their stakes in United Engineers and its closely held engineering subsidiary WBL Corp.

Before it proceeds with an offer, Perennial is seeking clarification from Singapore regulators on the procedures for a simultaneous purchase of the investors' holdings in both companies, according to one of the people. 

A deal could be delayed or fall apart, and another buyer could still emerge, the people said. OCBC and Perennial declined to comment in emailed statements, while representatives for KKR and SingHaiyi didn't immediately respond to requests for comment.

OCBC, Great Eastern and the bank's founding Lee family own more than 30 percent of United Engineers, people with knowledge of the matter said in September.

Buying their shareholdings would trigger a mandatory takeover offer for the company under Singapore rules. Perennial, a Singapore-based developer and landlord, owns stakes in projects including the Chinatown Point retail and office complex and AXA Tower in the central business district, according to its website.